Cork Protocol Pauses Contracts Amidst Investigation Of Potential Exploit

Phil Fogel, co-founder of Cork Protocol, that the team is investigating a potential exploit and has paused all smart contracts as a precautionary measure.

While it’s still early to calculate the damages, some reports suggest that Cork Protocol may have suffered a loss of approximately $12 million in a suspected breach.

According to Cyvers Alerts, a malicious contract was deployed on May 28, 2025, at 11:23:19 UTC. The contract was funded by an address beginning with 0x4771 and ending with 762B, which may be associated with a service provider.

Blockchain security firm SlowMist has issued a regarding the incident, drawing attention to the possible vulnerabilities exploited. At the moment, the attack is suspected to have occurred due to a private key leak or phishing incident involving a service provider. Cork Protocol said that it is still investigating and will report back with more information as soon as possible.

Backed by notable investors such as a16z and Orange DAO, Cork Protocol may face reputational and financial risks if the exploit is confirmed.

Cork Protocol is a decentralized finance platform that introduces innovative financial instruments to manage and mitigate risks associated with pegged assets, such as stablecoins and liquid staking tokens.

The platform’s primary product, Depeg Swaps, allows users to hedge against the risk of pegged assets deviating from their intended value. These instruments function similarly to credit default swaps in traditional finance.

Also, Cork Protocol enables participants to trade and manage the risks associated with pegged assets. Liquidity providers can earn yields from risk premiums, protocol fees, and trading fees, contributing to the protocol’s sustainability.

In September last year, the DeFi platform secured $2.15 million in funding and joined the a16z Crypto Startup Accelerator (CSX) Fall 2024 cohort. This, combined with funding from prominent investors like OrangeDAO, Ideo Ventures, and Outliers Fund, has been instrumental in accelerating the development and launch of its features.

Today’s security incident and its ongoing development, as well as Cork Protocol’s response to it, will likely have a big impact on the platform’s future role in the DeFi ecosystem.